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Novavax (NASDAQ:NVAX) Settles, Shares Blast Up
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Novavax (NASDAQ:NVAX) Settles, Shares Blast Up

Story Highlights

Novavax sends share prices blasting upward after finally reaching a settlement with Gavi that isn’t as bad as some feared.

Free NVAX Analysis

A new settlement means a huge win for biotech stock Novavax (NASDAQ:NVAX). Managing to put that matter to rest was enough to pull in a lot of cash from off the sidelines, as investors pushed Novavax up around 21% in Thursday afternoon’s trading.

That gain was enough to push Novavax shares up to levels not seen since last September, and now, the previous issues between Novavax and Gavi, the global vaccine alliance, have been settled. Under the terms of the arrangement, Novavax will either provide Gavi with $475 million in cash or its equivalent amount in free vaccines by the end of 2028. That’s in compensation for cutting off its earlier advance purchase agreement, which Gavi entered into with Novavax to get hands on its COVID-19 vaccines.

A Substantial Silver Lining

While this may not look like good news on the surface, there’s actually a silver lining. TD Cowen, back in April 2023, actually downgraded Novavax based on this issue, noting that Novavax stood to lose as much as $700 million based on this. That would put the company at serious risk, but with a settlement that’s only a little more than half TD Cowen’s worst-case, that should improve the outlook. It also doesn’t preclude the possibility that Novavax and Gavi could work together again in the future. This settlement just takes a major stumbling block out of the picture for a substantial but not back-breaking cash or product outlay.

Is NVAX Stock a Good Buy?

Turning to Wall Street, the last five days in trading for NVAX stock have been on the rise, but only recently. For most of the last five days, NVAX was in a slow, if steady, downward pace, but this decline broke earlier today with the news of the settlement. The full impact of that news didn’t last, but it did manage to keep share prices well above where they were four days ago.

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